Capital Markets Event TI Fluid Systems plc 24 September 2019
Today’s Objectives Providing detail around our products, competitive strengths and markets to enhance Product Overview understanding of why we consistently generate strong profitability and cash flow Outperform global Background on TI Fluid Systems’ confidence in our ability to continue to deliver revenue light vehicle outperformance versus global light vehicle production production Review of our Electrification Strategy, recent successes and our confidence that in the medium to long term, this will provide a higher level of revenue outperformance Electrification Continue emphasis on the resiliency of our business with strong margins and leading Financial cash flow generation Performance 24 September 2019 2
Agenda Timing Event Presenter 2:00 PM Welcome and Introduction Bill Kozyra Chief Executive Officer 2:05 PM – 2:20 PM Group Overview Bill Kozyra Segment Overview 2:20 PM – 2:35 PM - Fluid Carrying Systems (“FCS”) Stefan Rau Executive VP, FCS 2:35 PM – 2:50 PM - Fuel Tank & Delivery Systems (“FTDS”) Hans Dieltjens Executive VP, FTDS 2:50 PM – 3:05 PM Financial Performance Tim Knutson Chief Financial Officer 3:05 PM Summary Bill Kozyra 3:05 PM – 3:15 PM Q&A 3:15 PM – 4:00 PM Product Tour 24 September 2019 3
Introductions – Today’s Presenters Tim Knutson Bill Kozyra Stefan Rau Hans Dieltjens Chief Financial Officer CEO and President Executive VP, FCS Executive VP, FTDS Tim joined the Group in November Stefan was appointed as Executive Hans has been the Executive VP of Bill was appointed as CEO and 2008 and has served as Chief VP of FCS in January 2019. Stefan Fuel Tank & Delivery Systems since President of TI Fluid Systems in June Financial Officer. Prior to joining TI joined TI Fluid Systems in 2002. He 2014. Previously, Hans held various 2008. Prior to joining the Group, Bill held Fluid Systems, Tim was CFO of progressed his career with various senior level operational, technical and a number of senior executive positions, Meridien Automotive Systems. Prior roles in operations and engineering. sales positions within the Group and including that of President and CEO of Prior to his appointment as Executive at Hoogovens Aluminium Duffel. to this position, Tim held a number of Continental AG North America and senior finance positions at Delphi VP, Stefan was the Managing senior roles at ITT Automotive and Hans has 22 years of automotive Corporation. Director of FCS Europe. Bosch Braking Systems. experience. Tim has 30 years of automotive Stefan has over 20 years of Bill has 42 years of automotive experience. automotive experience. experience. 24 September 2019 4
1. About TI Fluid Systems 2. Automotive Market Overview 3. Customers Group Overview: 4. Revenue Outperformance Drivers a) Automotive Megatrends Bill Kozyra b) Technology c) Global Platforms d) China 5. Electrification
1. About TI Fluid Systems TI Fluid Systems plc has approximately 100 years of automotive fluid systems expertise We have award-winning technologies and products aligned with automotive megatrends, including new product offerings designed for hybrid electric vehicle (“HEV”) and electric vehicle (“EV”) applications We are a leading global supplier of automotive fluid storage, carrying and delivery systems for the light vehicle automotive market, with strong market shares across all key products We believe our market diversity is unparalleled and leading competitive flexible cost structure demonstrates the resilience of our business Current 2018 2018 2018 Market Adj. EBIT Adj. FCF Revenue Cap. margin €146 M €3.5 B ~ €1 B 10.8% 24 September 2019 6
1. Performance-Critical Products Performance-critical products that cannot be easily replaced • Engine lines and • Design and engineered specifically for each thermal products in OEM using proven technology the front of the vehicle • High quality products designed to last the life of the vehicle • Strong value add but relatively low cost products compared to the price of a vehicle • Component size varies depending on the size of the vehicle i.e. larger vehicles such as an SUV typically require longer lines and a • Plastic fuel tank larger fuel tank system & delivery module at the • Although, products are not visible in a vehicle, back of the vehicle they are performance-critical and cannot be easily replaced • Brake and fuel lines under the vehicle 24 September 2019 7
1. Global market and technology leader in automotive fluid systems Focused on highly engineered fluid storage, carrying and delivery systems for light vehicles Fluid Carrying Systems (“FCS”) Fuel Tank and Delivery Systems (“FTDS”) 58% of 2018 Revenue 42% of 2018 Revenue The Group operates through two key divisions: FCS and FTDS Designs, engineers and manufactures brake and fuel Designs, engineers and produces fuel tank systems lines, engine lines as well as thermal fluid products for and pump and module fuel delivery systems for vehicles, primarily with a EV strategic focus vehicles, primarily with a HEV strategic focus 24 September 2019 8
1. About TI Fluid Systems 2. Automotive Market Overview 3. Customers Group Overview: 4. Revenue Outperformance Drivers a) Automotive Megatrends Bill Kozyra b) Technology c) Global Platforms d) China 5. Electrification
2. Automotive Market Drivers Global factors driving Long Term Growth Long Term Growth in Emerging Tighter Environmental Globalisation Electrification Economies Regulations Macro Economic Factors driving Short Term Headwinds Short Term Business positioned well for both the short term and long term environment China Trade Tariff Fear of Global Economic Uncertainty Slowdown Slowdown 24 September 2019 10
2. Automotive Market Overview – Short Term Short term global light vehicle production impacted by China and trade conflict Overall global light vehicle production market remains challenging as evidenced in H2 2018 H1 2018 and and H1 2019. Macroeconomic headwinds have impacted the market with short term H2 2019 regulatory changes, China slow down and trade conflict Factors impacting 2019 global light vehicle production to potentially continue into 2020, 2020 Global although importantly, China direction not known 1. Europe - potential market weakness from exports (dependent on China) as well as continuation of economic uncertainties 2. China - macroeconomic environment unsettled with potential escalation of US-China 2020 Regions trade conflict . Although, new government incentives could provide favourable impact 3. North America - continues to be generally flat with demand weighted towards larger vehicles and pick up trucks 24 September 2019 11 Source: IHS Markit.
2. Automotive Market Overview – Long Term Long-term automotive production expected to grow 2%+ and TI Fluid Systems expecting to outperform creating strong revenue growth business model Global light vehicle production 2000-2023 millions of units 2.9% Historical CAGR 2.3% CAGR 120 98.8 95.9 95.2 94.2 93.1 93.0 Rest of World 90.4 90.1 100 88.8 87.4 84.7 81.5 76.9 74.3 Other Asia Pacific 70.6 80 67.5 66.8 64.2 61.6 59.4 58.6 57.1 56.3 54.5 China 60 Japan & Korea 40 Europe 20 North America 0 24 September 2019 12 Note: Presentation subject to rounding Source: IHS Markit.
1. About TI Fluid Systems 2. Automotive Market Overview 3. Customers Group Overview: 4. Revenue Outperformance Drivers a) Automotive Megatrends Bill Kozyra b) Technology c) Global Platforms d) China 5. Electrification
3. Highly diversified customer base Highly diversified customer base with no single customer making up > 12% of revenue 2018 Revenue by Customer • Highly diversified customer base with no single 2% Aftermarket customer making up > 12% of revenue facilitates revenue consistency 12% 17% Daimler Other OEMs • OEM trend towards sourcing global platforms 10% 4% • Multi-decade trusted relationships Hyundai BMW • Close engineering collaboration early-on enables 5% efficient design process and competitive advantages Toyota 10% • Well established partner to the OEMs for our Volkswagen products 7% PSA 7% 9% General Motors FCA 9% 8% Ford Renault-Nissan 24 September 2019 14 Source: Company estimates
3. Strong customer relationships globally Supplying to almost every brand of vehicle produced around the globe • Commercial and engineering relationships developed over many years • Manufacturing facilities located close to customers provide a logistics advantage with strong barrier to entry and cost competitiveness • Products typically sole-sourced for life of programme creating “sticky business model” • Strict financial discipline in quoting customer programmes supports margins and free cash flow • Trusted “strategic supplier” and partner to customers • Creating design and engineering collaboration opportunities for new technologies (EV and HEVs) 24 September 2019 15
1. About TI Fluid Systems 2. Automotive Market Overview 3. Customers Group Overview: 4. Revenue Outperformance Drivers Bill Kozyra a) Automotive Megatrends b) Technology c) Global Platforms 5. Electrification
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